LOUISVILLE, KY: Last year saw more business crisis news than any other in the past decade, according to the latest annual report from the Institute For Crisis Management.
The institute analyzes business crisis news in more than 1,500 newspapers, business magazines, wire services, and newsletters worldwide each year.
It found more crisis news last year than in any since it started keeping track in 1990.
"The downturn in the economy, the collapse of the dot-com industry, contaminated foods, tires, defects and recalls in aircraft, car/truck manufacturing and pharmaceuticals, strikes or the threat of strikes in the airline industry, fraud, insider trading, and embezzlement in the banking and securities industries all contributed to an increase in the number of crises, the institute's annual crisis report stated.
Class-action lawsuits ranked as the most common crisis, followed by defects and recalls. Labor disputes round out the top three, which hasn't changed in three years.
What did change last year was the proportion of crises companies faced from forces outside their control, said Larry Smith, institute president.
Management is traditionally responsible for an average three-quarters of all business crises, Smith estimated. Last year, though, that dropped to 48.6% because of terrorist acts, employee violence in the workplace, and regulatory issues.
"I don't think that management will be knocked out of that top spot again, Smith predicted. "Top management has their blinders on that nothing could go wrong. Bad things do happen to good companies, he warned.
Most corporate executives today have become obsessed with disaster planning for another 9/11, he noted. But they continue to overlook how to spot and defuse potential business crises before they mushroom into major media events.
Looking at individual companies last year, Smith found Ford had the most crisis coverage, followed by Bridgestone/Firestone and Microsoft. In 2000, Firestone was first, and Ford came in second.
Boeing, which had been third in 2000, slipped to fifth last year.
Among industries, computer software makers were the most crisis-prone in 2001. Telecommunications companies, which had been top in 2000, fell to fourth. Securities and commodity brokers came in second last year, followed by airlines.
The high level of crises last year is adding to a general public distrust of business, Smith said, adding, "I think the more crises, the lower the confidence level."
MOST CRISIS-PRONE IN 2001
7 Critical Path
8 American Airlines
10 United Airlines
1 Computer software makers
2 Security and commodity brokers
3 Scheduled airlines
6 Communications equipment
7 Telephone communications
8 Motor vehicle manufacturers
9 Banks/bank holding companies
10 Computer/office equipment
SOURCE: Institute for Crisis Management annual crisis report